This is what most people would consider a "knee-jerk reaction" to a veritably problematic situation, the feeling a competitor that is little more than a ripoff may be beating you to the punch with a cheaper product and without all the R&D costs you had to incur. Yet they probably did the very worst thing they could have done: piss of their clientele. They shouldn't have been aiming for the everyday user- the TREZOR was, and still is way too expensive for that.
Sure, the code is still "open" for auditing, but if that was the idea from the beginning, why not make it so? All what SatoshiLabs has done with this is NOTHING to stop any dodgy Chinese IP-violating company from making a clone and gave the BWallet folks the opportunity to make their own offering (They just open-sourced everything, including the server and the plugin) more attractive so they aren't considered "just a ripoff" and to top it off, they pulled a dirty trick, which ultimately failed by the way, to make it seem they came to that decision 6 months ago.
tl;dr Slush, you dun goofed. You're still a REALLY respected man in the Bitcoin community and the face of SatoshiLabs, but a rash decision like this did no one favors.